Annual recruitment survey finds return of war for talent and huge skills gaps in UK

Employers struggling to fill vacancies, are being inundated with unsuitable candidates, while talented individuals are staying put, concluding that the grass is greener on their own side of the fence in these volatile economic times. These are the top line findings from the annual Chartered Institute of Personnel and Development Resourcing & Talent Planning survey, produced in partnership with Hays.

Three quarters (73%) of organisations have highlighted an increase in the number of unsuitable candidates for job vacancies, fuelled by the sheer weight of application numbers due to high levels of unemployment. However, more than half of employers (52%) believe that competition for talent is even greater, compared to 41% and 20% in 2010 and 2009 respectively.

This year, three-quarters (75%) of organisations experienced recruitment difficulties. As in previous years, the main reason for these recruitment difficulties is a lack of necessary specialist or technical skills (72% compared to 67% in 2010), with managers / professionals and technical positions (28%) the most difficult to fill.

One clear contributing factor to the talent shortage issue is that those who are in work are reluctant to leave in a volatile market. The median turnover rate has remained consistently low throughout the recession and beyond (2011: 12.5%; 2010: 13.5%; 2009: 15.7%; 2008:17.3%), with figures this year indicating slightly less will to leave than even at the height of the recession.

Not surprisingly, the rate of voluntary leavers has increased slightly in the private sector (8.7% in 2011, compared to 7.4% in 2010) but decreased in the voluntary (7%% in 2011,compared to 10.2% in 2010) and public sector services (3.4% in 2011, compared to 5.8% in 2010), reflecting the Government's austerity programme.

Claire McCartney, resourcing and talent planning adviser, CIPD, says: "High levels of unemployment have boosted quantity, but employers are still struggling with quality. Headlines focus on high levels of unemployment, but those stark statistics mask an ongoing struggle for employers to find the skills and experience they need to drive their businesses forward. Shortages of specialist and technical skills run the risk of slamming an unwelcome brake on the long-term competitiveness of the UK economy.

"Skills shortages are undoubtedly being exacerbated by 'grass is greener on this side of the fence' syndrome. Free movement of talented individuals is being impeded by a reluctance to voluntarily change jobs in volatile economic times - and the problem is worse now than it was at the height of the recession. With more cuts in the public sector expected and only marginal private sector growth, we expect a continued 'safety first' approach from employees, with many wanting to stay put for the next couple of years at least, making it difficult for employers to really drive competitive edge through the recruitment of talented individuals."

With this backdrop of a weak recruitment market, four in 10 (39%) also cite increased tuition fees as a concern. Respondents are worried that this will affect the number of graduates coming into the labour market, affecting their access to yet another talent pool.

The survey also finds active engagement with Government policies aimed at supporting job seekers and bridging skills gaps. Strategies employers are adopting include increasing the use of apprenticeships (30%), increasing the use of interns (27%) and considering sponsoring students through university (10%).

Julie Waddicor, managing director of Hays Human Resources, says: "The rate of youth unemployment continues to soar, but employers are still complaining about the lack of talent on the market. It's crucial for organisations to communicate not only what skills they need now and in the future but also really sell themselves as an employer of choice in order to secure their talent pipeline in years to come.

"Equally, with university fees increasing there is a real need for more to be done to encourage businesses to take on apprentices and introduce other initiatives to help young people gain experience in the workplace. Only then will UK organisations really succeed in closing the skills gap."

Additional findings from the survey include:

Just over half (54%) of survey participants report having a formal resourcing strategyHalf of the organisations surveyed report the economic climate has had a negative impact on their organisation's resourcing budgets for 2011-12. This year, it is the public sector that is most severely hit, with four out of five (82%) reporting their resourcing budgets will be reduced (up from 59% last year).

Changes in resourcing and talent practices in 2011 compared with 2010 reflect a stronger focus on costs and reductions in budgets. More organisations anticipate they will be focusing on developing talent in-house, retaining rather than recruiting talent and reducing their reliance on recruitment agencies and external consultants for resourcing and developmentNearly half of public sector organisations will be implementing a recruitment freeze in 2011, compared with one-fifth of organisations overall. Two-thirds (66%) of public sector organisations and 29% of private organisations will be reducing the number of new recruits they hire.